Breaking News
Translate

Big seasoning brands dither as new entrants disrupt market dynamics

Kindly Share This Story:
Big seasoning brands dither as new entrants disrupt market dynamics
Stock Market

By Princewill Ekwujuru

Big seasoning brands are struggling to retain their positions in the market due to the shift in consumer trends occasioned by increasing competition from new seasoning products.

The shift in consumer trends became more apparent during the festive period, during which patronage almost evenly split between established and new seasoning brands.

Marketing experts opined that if the market trend witnessed during the festive period persists, it will lead to a reduction in the market share and dominance long enjoyed by the big seasoning brands.

At the heart of the contention for market share is product pricing and varieties.

Some of the new products have several varieties’ and sell at three sachets for N100 compared to big brands which have do not have varieties and are mostly priced at N50 a sachet.

READ ALSO: Expert worries over high rate of HBP, diabetes among market women

In addition to these are attractive packaging, visibility, and positioning of the new brands on shelves which attracts consumers.

But the big seasoning brands are not relenting in their pursuit to remain relevant and visible in the market, they are also responding with attractive sachet packs.

They have deployed other marketing tools such as broadcast, print, and outdoor advertisements, as well as experiential marketing approach with public cooking competitions.

They have also employed a direct marketing approach to reach consumers (home service delivery).

The big brands have also resorted to the endorsement of celebrities to boost the image of their products, which the new entrants can afford, because of the huge financial involvement.

Some of the new seasoning brands contending for the attention of the consumers, and hence disrupting market share dynamics are Testify, marketed and distributed by Gennon Global Resources;    Lagos State Deco, marketed and distributed by Golden Rock Industries Limited, Lagos State;    Ehuru and Larsor, produced by Tiger Foods Limited, Anambra State;    Famous, manufactured by Famous Natural Spices Limited;    Ajino moto, produced by West Africa Seasoning Company (WASCO) Nigeria Limited, Lagos. They all come in powder and packed in sachets.

The big brand which has long dominated the market include Knorr and Royco both in cube and powder sachet, produced by Unilever Nigeria Plc;    Maggi in both cube and powder sachet, manufactured by Nestle Nigeria Plc; Onga, both in cube and powder sachet produced by Promasidor Nigeria Limited.

Vanguard Companies & Markets (C&M) findings show that food spices have become extremely popular, especially as the gourmet food trend continues to expand across the nation.

C&M noted that homemade dinners are often incomplete without the added kick that seasoning provides. As the desire to cook good, aromatic and tasty meal prevail, the penetration and usage of seasoning has become imperative.

Findings by C&M also showed that the new seasoning brands are available in supermarkets, open markets, and neighbourhood shops.

Like the big seasoning brands, fringe products are well packaged to attract and create a huge first impression on consumers.

READ ALSO: 2020: Stock market will record double digit return – APT Securities

Adventurous with seasoning

C&M observed that consumers are open to greater experimentation when it comes to seasoning their meal, with the majority of Nigerian consumers saying they enjoy experimenting with different seasonings, thus providing an opportunity for brands to increase sales.

However, this openness for experimentation tends to be particularly dominant among young Millennials – making them important demography for the industry.

C&M also discovered that encouraging the youths to embrace the culture of meal seasoning requires the development of products that either makes the cooking process more convenient or by innovating around a wider variety of flavours.

16-24-year-olds are typically much more receptive to the convenience of foods and Millennials are far more likely than any other generation to be interested in seeing more convenient ways to use seasonings.

While Millennials are an important target for seasoning brands, other demographics also offer potential growth opportunities in Nigeria.

The battle between Maggi and Knorr

The two major brands in the food seasoning market in Nigeria today are Maggi and Knorr. Even with the introduction of new seasoning brands, both brands have continuously battled for the leadership spot of the market.

The Knorr brand was founded by Carl Heinrich Knorr, and in 1912 the first Knorr Bouillon cube was introduced. Since then, Knorr has been enjoyed in virtually most parts of the world. It is one of the world’s largest cooking brands sold in over 78 countries.

The Knorr cubes, after being bought over from Cadbury Nigeria by Unilever, has remained a force to be reckoned with in the seasoning market.

Over the years, the company has invested in machines, brand extension and new tastes in its bid to give consumers premium quality cubes.

On the other hand, Maggi, an international brand owned by Nestlé, was founded in 1872, by a Swiss entrepreneur called Julius Maggi.

According to the company, it sells over 100 million cubes in the Central West African region daily. The brand has occupied a big space in the hearts of consumers and it has become the generic name for seasoning cubes in the country.

The makers of Maggi, in an ongoing effort to constantly improve the brand and make it tastier, healthier, more affordable with better nutritional value, and more appealing to customers, launched two extensions, the “Maggi Naija Pot”    and “Maggi Chicken” into the market.

Onga’s fight for a space in the market

With the cube seasoning market growing daily, Promasidor took a bold step to bid for market share by creating the cube form of its Onga seasoning powder.

The race for leadership in recent times has become stiffer among brands and every brand is tightening its belt to avoid a slide in market share with the entry of Onga cube.

Onga is arguably the leading brand in the seasoning powder segment, and it’s the entrance into the cube market disrupted the market share of leading brands.

What consumers, retailers say

Although the usage of seasoning is prevalent, the choice of seasoning brand varies significantly among consumers.

A shop owner,    Mrs. Roseline Nnaji, at the    Amukoko Oja market in Amukoko, Ajeromi Ifelodu Local government, Lagos said: “This Xmas I was surprised that majority of my customers opted for the new brands”. She, however, stated that the Knorr and magi cube brands are still no pushover in the market, despite the stiff competition from the new entrants.

According to her, “We have various brands of seasoning cubes in Nigeria today. As a trader, I discovered that over time, consumers have come to love Knorr cube and it has become their preferred brand, yet these new entrants are eating deep into their share.”

Another shop owner in the same market, who simply gave her name as Mama Ada said: “The rate at which these new products are coming into the market is giving the big brands a course to re-strategise to remain relevant in the market. This festive period customers were going for the new brands because they are cheaper.”

She also added that most of the big brands are on the same price range but the new brands are a little cheaper which attracts customers.

Mrs. Adenike Ojo, a consumer, said, “You know we consumers like to experiment especially when we see new products in the market. I tried some new products this Xmas season and    I discovered they not bad as usual as we think when we see new products, and they are also affordable.”

READ ALSO: 10 companies control 79% of stock market size

What distributors say

Distributors who spoke to C&M, however, stated that both the new entrants and established brands are performing well

A distributor in Oke–Arin Market, Lagos Island, Alhaja Ajit said: “My record book shows that the new brands are doing well.

During the festive period, from December 18, 2019, to January 17, 2020, I sold 17 cartoons of the new brands and 12 cartons of the big brands. I think people are beginning to appreciate the new products, but to me, they still have    a lot to do.”

At Idumota, Moninat, a shop attendant at Mama Kafila, who has been in the seasoning market for 13 years said:    “There was a serious sales war during the festive period.

The big seasoning brands held their own during that period. You know we have been with them for a very long time.”

“From my observation, “it would be difficult for the new brands to push them out of the market because some of these new products do not have the financial enablement, however, there are some with the    financial might, but it will not be an easy task.”

vanguard

Kindly Share This Story:
All rights reserved. This material and any other digital content on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from VANGUARD NEWS.

Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.
Do NOT follow this link or you will be banned from the site!